McDon­ald’s set to nearly dou­ble out­lets in China

Kuwait Times - - BUSINESS -

BEI­JING: Fast food gi­ant McDon­ald’s said yes­ter­day it would al­most dou­ble the num­ber of restau­rants in China over the next five years as it re­fo­cuses on in­ter­na­tional mar­kets amid slow­ing US sales. The Illi­nois-based burger chain will add 2,000 stores to its cur­rent 2,500 in China and aim for dou­ble-digit sales growth in each of the next five years, McDon­ald’s said in a state­ment. In par­tic­u­lar, it will launch a foray into thir­dand fourth-tier cities, where it ex­pects 45 per­cent of its China restau­rants to be lo­cated by that time. More than 75 per­cent of its stores will of­fer de­liv­ery.

It made the an­nounce­ment while also say­ing it had fi­nal­ized a strate­gic part­ner­ship with Chi­nese con­glom­er­ate CITIC Ltd and US-based in­vest­ment firm Car­lyle Group. McDon­ald’s an­nounced ear­lier this year that it would form a com­pany with CITIC Lim­ited, CITIC Cap­i­tal Hold­ings and Car­lyle Group to act as a fran­chisee for the chain’s busi­ness in main­land China and Hong Kong for 20 years.

CITIC is a vast Chi­nese state-owned con­glom­er­ate with in­ter­ests rang­ing from en­ergy and man­u­fac­tur­ing to real es­tate. The new part­ner­ship be­comes the largest McDon­ald’s fran­chisee out­side the US. “China will soon be­come our largest mar­ket out­side of the United States,” McDon­ald’s pres­i­dent and CEO Steve Easter­brook said in the state­ment. McDon­ald’s has been over­haul­ing its global struc­ture un­der Easter­brook to com­pen­sate for slower growth in mar­kets such as France and the United States.

McDon­ald’s sales took a hit in re­cent years as ten­sions over the South China Sea dented US com­pa­nies’ earn­ings in China. Its China busi­ness also suf­fered a blow in 2014 af­ter a food safety scan­dal in­volv­ing one of its meat sup­pli­ers. In the China mar­ket, McDon­ald’s also faces com­pe­ti­tion from fast-food mar­ket leader KFC. — AFP

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